Yesterday, Judge Cote declined a defendant’s request to disqualify the SEC’s entire trial team on the eve of trial after the SEC received allegedly privileged communications between the defendants and their counsel. The documents were seized by federal agents during the execution of a search warrant and provided to federal prosecutors, who in turn provided them to the SEC.
Judge Cote found that this did not warrant disqualification, as the SEC had taken steps to ensure that potentially privileged documents were excluded from its review and had informed defense counsel as soon as privileged documents were discovered. Judge Cote further noted that:
[T]here is a danger that the motion to disqualify the entire SEC trial team from an investigation that has been ongoing since 2013 is tactically motivated. . . . [A]ssuming for the purposes of this motion that the four documents are indeed privileged, it appears that the SEC trial team has only reviewed one of the four documents, the Fayyer Notes. [The defendant] has not pointed to any statement in the Notes, however, that is at odds with the positions it has taken publicly in opposition to the SEC’s litigation or that reveals any undisclosed litigation strategy or statement harmful to [the defendant].